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I’m normally an easy-going guy, but there are some things in the financial world that really irritate me. Here are three of them. I’d like to hear about yours.

The IRS

We’ve all heard the horror stories about the U.S. Internal Revenue Service pursuing thousands of dual Canadian/American citizens, demanding that they file tax returns dating back decades and imposing heavy fines for non-compliance.

It turns out it’s not just dual citizens in this country that they’re after. It’s everyone with a hint of U.S. citizenship, no matter where in the world they reside. They even swooped in on the shaggy haired Lord Mayor of London, Boris Johnson, who had the bad luck to be born in New York City while his father was a student there, thus making him a dual U.S./U.K. citizen. After he sold his London home recently, the IRS demanded a share of the profit. The Mayor protested but finally paid up. He’s now planning to renounce his U.S. citizenship.

I am not an American citizen. However, that hasn’t stopped the IRS from poking around in my financial affairs as well. Last week I received a letter from RBC Dominion Securities insisting that I complete a U.S. W8BEN form for my brokerage account. RBC promised they would not share the information with the IRS, adding: “We are simply required to have it on file to continue to offer you the preferential tax rate and confirm your non-U.S. status.” And who do you suppose “requires” RBC to have this information? One guess.

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I thought briefly about not complying, but then I read a little further. Failure to do so, RBC warned darkly, could subject me to a higher rate of withholding tax on U.S.-source income and the imposition of “trading restrictions on your account, limiting you to sell orders only in U.S. securities”. Muttering to myself, I completed the form and sent it off.

To paraphrase Pierre Trudeau, the IRS has no place in the financial affairs of Canadians. It’s time that governments and financial institutions around the world stood up to their ham-handed practices.

Bank foot-dragging

Last April, federal finance minister Joe Oliver announced in the budget that the minimum withdrawal rates for registered retirement income funds (RRIFs) would be lowered significantly, effective with the current tax year. That was in April. A few days ago, I called a couple of bank-owned brokerage firms to ask that my quarterly RRIF payments be adjusted accordingly. Sorry, I was told in both cases. We haven’t gotten around to updating our systems yet. But we should have it done by year’s end.

What’s the hold-up? The new government withdrawal schedule was published on budget day. The data entry process for the new percentages should take less than one hour. Yes, it then has to be applied to each account, but they’re all in the system. I’m not a techie, so maybe I’m missing something, but it seems like two months should be plenty of time to make the transition.

In the meantime, many people are receiving RRIF payments they may not need and are running up their taxable income accordingly. Yes, you’re allowed to recontribute any overpayments by Feb. 29, 2016, and claim a refund. But human nature being what it is, the money will probably be spent by then.

High credit-card rates

According to CreditCards.com Canada, 52 per cent of households in this country were carrying debt on their plastic in 2014. The total amount as of Nov. 30 was a staggering $75 billion. That’s $2,627 for every person in this country age 18 and older. I could not find any statistics as to the average interest rate charged on that debt, but my guess is that it would be outrageously high.

While there are some low-interest rate cards, the majority of bank cards charge 19.99 per cent annually on unpaid balances and 22.99 per cent on cash advances. Store cards are even worse; my Bay card would sock it to me at a rate of 29.99 per cent if I ever came up short on my payment (which I wouldn’t dream of doing).

These usurious rates are still being charged at a time when interest rates are near historic lows. How do these companies get away with it? Why aren’t we mad as hell and refusing to take it any more? Beats me.

Those are my beefs. What makes you mad when it comes to money and investing? Send your thoughts to gordonpape@hotmail.com and write Star Comment in the subject line.

Gordon Pape is editor and publisher of the Internet Wealth Builder and Income Investor newsletters. His website is www.BuildingWealth.ca

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